This perilous situation explains why investment banks are already calling for the government to prepare for more fiscal spending. Central bank monetary policy (low interest rates) has reached its limit, and when the recession comes the government will be needed to open the cash faucets. The Morgan Stanley Research team made this exact call on May 3, one of many recent banks to urge more fiscal response to the looming crisis:

While monetary policy is a necessary part of the solution, it is clearly not sufficient. In this post financial crisis demand-deficient world, we think that policy-makers will need to stand ready with the right fiscal policy response.

But the Tories are currently going the wrong way, tightening fiscal policy, the Morgan Stanley team says:

... Using changes in the primary budget balance as a percentage of GDP as a proxy for the fiscal stance, fiscal tightening stepped up in 2015, but is now set to be less onerous subsequently - before a sharp step up in tightening at the end of the parliament just before the next election.

In that case, if the UK stays in Europe economic activity might bounce back. But that's the optimistic scenario. The alternative explanation is that we're simply at that stage in the cycle: We've had about six years of growth, and now the cycle is turning back ... down.